Breakfast | US stocks plummet, S&P falls into correction territory! But Intel and quantum computing stocks rise against the trend

Market Overview

Concerns over a government shutdown and escalating trade threats from Trump have offset positive inflation signals, leading all three major U.S. stock indices to hit six-month lows. The S&P 500 has entered correction territory, with both the Dow Jones and S&P falling over 1%, while the Nasdaq closed down nearly 2%.

The "Tech Seven" saw widespread declines: Meta fell 4.67%, Apple dropped 3.36%, Tesla decreased 2.99%, Google A fell 2.6%, Amazon dropped 2.51%, Microsoft declined 1.17%, and Nvidia fell 0.03%.

However, Intel and quantum computing stocks surged against the trend, with quantum computing stock Quantum (QMCO) rising nearly 32% and QBTS up nearly 19%; Intel increased by nearly 15%.

Adobe fell 13.85%, despite strong company performance, as its second-quarter EPS expectations were below the market's median forecast.

People's Bank of China: Implement a moderately loose monetary policy and reduce reserve requirements and interest rates at the right time

The People's Bank of China stated that based on domestic and international economic and financial conditions and the operation of financial markets, it will reduce reserve requirements and interest rates at the appropriate time, comprehensively using various monetary policy tools such as open market operations to maintain ample liquidity, ensuring that the growth of social financing scale and money supply aligns with economic growth and overall price level expectations.

Trump: Will not "yield" to Canadian tariffs, will not change the decision on reciprocal tariffs, and the economic impact of tariffs "will not last long"

Trump again hinted that Canada could become the 51st state of the U.S., stating that the current U.S.-Canada border is "an artificial line." He warned that a government shutdown could lead to very, very high taxes. He reiterated his desire to acquire Greenland and mentioned sending more U.S. troops to Greenland, saying, "We need this international security." He also stated that the EU is "very annoying."

Trump expressed hope to meet or talk with Putin, but media later reported that U.S. sanctions on Russian oil, gas, and banking sectors would be intensified.

U.S.-EU trade war escalates, Trump threatens to impose 200% tariffs on EU alcoholic products, European spirits stocks fall across the board

Trump stated that if the EU does not immediately lift the 50% tariff on U.S. whiskey, the U.S. will soon impose 200% tariffs on all wines, champagnes, and alcoholic products from France and other EU member states. Trump also claimed that the EU is one of the "most hostile and abusive tax" institutions in the world, created solely to "take advantage of the U.S."

U.S. Treasury Secretary Basant: "Slight" market fluctuations are not a concern, "detox period" does not necessarily indicate economic recession

Basant stated that the White House is focused on the real economy and medium to long-term markets, and he is not worried about "slight" market fluctuations within "three weeks." If policies are appropriate, they will drive the economy and markets higher; the impact of the "detox period" from reliance on government spending on economic growth depends on the speed of shifting government spending to the private sector, as the current level of government spending is "unsustainable." Basant denied that the "detox period" implies a recession, as the three major U.S. stock indices had once erased most of their losses.

Basant does not consider Trump's threat of imposing 200% tariffs on EU alcoholic products to be a "big deal," stating that the tariffs would only affect "one or two" products; he believes that the adjustment of the dollar is natural and that the potential government shutdown should be blamed on the Democrats

The risk of a U.S. government shutdown this weekend has receded, Senate Democratic leader Schumer abandons efforts to block the Republican temporary spending bill

Schumer said on Thursday that there was simply no room for choice. Compared to the Republican's stopgap spending bill, a government shutdown would be far worse. He would vote to keep the government running rather than shut it down. A government shutdown would mean that Trump and Musk would have all the decision-making power.

Reports say Tesla is "partnering" with Baidu to address FSD's "incompatibility" issues in China

Reports indicate that Tesla's collaboration with Baidu focuses primarily on optimizing the FSD Version 13 software. Baidu has dispatched a team of mapping engineers to Tesla's Beijing office to work on integrating Baidu's navigation map information (such as lane markings and traffic signal data) more accurately into the FSD system.

What does Google's new AI model running on a single H100 mean for Nvidia?

Google's recently released Gemma 3 model can run advanced AI applications without the need for extensive GPU deployment. Analysts believe that this move by Google is a challenge to Nvidia's dominance in the AI hardware market—by providing models that can run efficiently on various hardware platforms, Google is reducing developers' reliance on high-end Nvidia GPUs.

Google releases a large model for robotic bases, significantly enhancing robot versatility, capable of folding paper and dunking

Google's DeepMind released a brand new AI model on Wednesday, utilizing its Gemini 2.0 language model, specifically trained for controlling robots. The model has greatly improved environmental adaptability, instruction comprehension, and operational flexibility.

Citadel, P72, and Millennium report rare full-line losses in February, high-leverage "multi-strategy giants" face fierce liquidation amid market downturn

In February, Citadel fund recorded its largest monthly decline since May 2021, with major multi-strategy hedge funds like Millennium and P72 all reporting losses. Analysts believe that "multi-strategy funds" allocate large amounts of capital to multiple teams for management, which helps reduce risk; however, a significant market downturn may lead to collective liquidations by fund managers under performance pressure, further exacerbating market sell-offs.

While Palantir is hot among retail investors, the CEO has been "cashing out like crazy"

Since the beginning of 2024, CEO Alex Karp has sold $1.9 billion worth of Palantir stock through the company's stock sale plan, second only to Meta's Zuckerberg in terms of sale volume. Karp is known for his unconventional remarks and behavior, but his "outlandish" statements seem to be well-received by retail investors.

Morgan Stanley lowers Apple’s target price, Siri upgrade delayed, is the iPhone replacement wave cooling off?

Analysts warn that about 50% of Apple users who have not upgraded to the iPhone 16 admit that the delay in launching AI features has affected their upgrade decisions. The delay in launching more advanced Siri features may impact Apple's plans to accelerate iPhone upgrade rates in fiscal year 2026. The product update cycle for Apple has always been an important indicator for investors. Morgan Stanley previously estimated that the iPhone update cycle would shorten by 0.2 years in fiscal year 2026, which could lead to 255 million iPhone shipments (an 11% year-on-year increase)

Key Focus on Hong Kong Stocks

In response to rumors about lowering the investment threshold for Hong Kong stock investors, a spokesperson for the Hong Kong Stock Exchange stated that they are conducting preliminary research on adjusting the number of shares per lot to ensure that Hong Kong's market structure keeps pace with the times. They will consider the advantages of different proposals and will conduct market consultations later.

U.S. February PPI Exceeds Expectations, Zero Growth Month-on-Month, Smallest Increase in Seven Months, Service Costs Decline

The decline in service costs is the main factor behind the slowdown in February PPI, but commodity prices rose in February. Price categories in the PPI that influence the Federal Reserve's preferred inflation indicator, the PCE price index, generally strengthened, including a 1% increase in hospital care costs and a 0.5% growth in portfolio management costs